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Navigating U.S. supply chain disruptions

Three strategies chemical companies should keep in mind when navigating global trade

With abundant feedstocks and the growth of exports, U.S. chemical producers must navigate a new set of supply chain challenges.

They will need to overcome key choke points if they are to provide the proper service levels to global customers while controlling costs. And they will need to build supply chains that are nimble, dynamic and able to handle growing volumes.

By adopting innovative strategies for supply chain management that help avoid disruptions, producers can drive greater efficiency as they pursue growing export opportunities.

Market challenges and opportunities

What is the current situation?

As recently as 2008, the North American energy and petrochemical industries were considered mature, and many observers assumed the U.S. would be a net oil and gas importer for years to come. But since then, the U.S. has become awash with inexpensive gas and petrochemical feedstocks, a result of the shale-drilling revolution.

What does this mean?

The United States has become an attractive proposition for both domestic and foreign capital investment, but it is unlikely that the U.S. domestic market can absorb the resulting capacity increase. Chemical companies will need to look abroad for customers and redesign their supply chains to accommodate the growth in global trade.

What will it take to succeed?

The winning chemical companies will be those that increase the flexibility, speed and effectiveness of their supply chains to satisfy the demands of overseas customers. Others will struggle to capture the expected returns on their investments.

Three key strategies for supply chain improvement

Develop integrated global operating models

Companies must reexamine their key business functions (e.g., marketing, supply chain, product management, manufacturing and finance) to support cross-functional and cross-geography organizations and processes.

Enhance logistics capabilities

By utilizing analytics tools, companies can develop a deeper understanding of external supply chain factors and transportation options across multiple providers. From these insight-driven logistics, they can plan for and overcome delays.

Employ digitally-enabled supply chain management

Control towers that support supply chain processes could help U.S. petrochemical producers better manage their complex global supply chains and bring products and services to market in an optimized manner.

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